Except for flat to slightly higher numbers in Western Canada and El Paso’s Bondad pool, prices continued to slip at nearly all points Friday. Cooling load remained fairly high throughout most of the southern third of the U.S., but that was overcome by forecasts of little more than warm weather in northern market areas, the previous day’s drop of 6.8 cents by September futures and the usual weekend decline of industrial demand.
Declines ranged from 2-3 cents to more than 40 cents, but only Waha saw a bigger loss than about 20 cents.
The screen will continue negative guidance for Monday’s cash market after slipping another 5.4 cents Friday (see related story).
Florida Gas Transmission kept an Overage Alert Day in effect through its fifth day Friday, but the Florida citygate fell nearly a dime in response, and Florida Gas numbers in the production area saw similar dips.
Although the averages may seem relatively cool to much of the U.S., remember they’re for the western Upper Midwest. Northern Natural Gas said with a normal system-weighted temperature of 70 at this time of year, it projected averages of 76 Thursday followed by 77 Friday through Sunday.
IntercontinentalExchange noted a major decline of Columbia Gas volumes on its system, from 809,700 MMBtu Thursday to 678,000 MMBtu for the weekend, with the price falling nearly 15 cents.
A Rockies producer lamented that CIG prices had slipped to less than $3, and CIG basis relative to Henry Hub was down to about minus $1.25. That was a far cry from last year when Rockies basis was near parity with Gulf Coast pricing following the completion of Rockies Express and other regional takeaway capacity, he said.
Approximately a year ago CIG pricing was even softer in the low $2.70s, he said, but at that point it was only about 32 cents less than Henry Hub. It’s not a pipeline problem any more, the producer continued; now it’s primarily demand, with the West experiencing both too much storage inventories and relatively mild temperatures for much of the summer.
Actually, those are problems for not just the Rockies but almost everywhere west of the Mississippi River, he said. However, regional producers aren’t suffering too much, he said, because he thinks that at least half or more of Rockies production is hedged against the current low prices.
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